Colombia finished 2012 with the highest amount of foreign currency reserves in the country’s history.
According to data from Banco de la Republica, the country’s central bank, at the end of 2012, Colombia had $37.46 billion in foreign currency reserves — a 16% increase from the same period in 2011. Of the reserves, 87% is in US dollars with the remainder divided up between euros, Canadian dollars and Australian dollars.
Colombia is currently feeling pressure from economic analysts and government officials to increase foreign currency purchases in the interest of curbing a surge in the Colombian peso. A strengthening peso, analysts worry, could cripple manufacturing and other price competitive export sectors that rely on a relatively weak peso.
According to Bloomberg, Finance Minister Mauricio Cardenas told reporters that “the government is aware that this [a rising peso] is a problem. It’s a reflection of the economy’s strength.”
“We will be studying formulas, options in the next few weeks to address this situation,” said Cardenas.
Policy makers plan to discuss ways to curb the strengthening peso when the central bank meets later this month.